Cattle futures dropped and lean hogs popped in Tuesday’s trade. Here’s what’s on our radar for today’s session.
Feeder Cattle (January)
Feeder cattle futures failed in our pivot pocket yet again, keeping int intact from 246.82-247.60. That failure took prices down to our 3- star support pocket from 242.75-243.77. This is a bit of a must hold area for the market, a failure to defend this pocket on a closing basis could spark additional technical selling pressure down to 239.62-240.15.
Resistance: 249.85-250.80*, 253.075-253.90
Pivot: 246.82-247.60
Support: 242.75-243.77, 239.62-240.15
Seasonal Tendency Update
Below is a look at historical price averages for January futures on a 5, 10, 15, 20, and 30 year time frames (Past performance is not necessarily indicative of future results). Looking at this chart, it looks like November can be a pretty choppy and indecisive month for price trends.

Lean Hogs (February)
Lean hogs continued to climb higher into uncharted territory marking new contract highs again. This brings the RSI to 76.17, the most overbought in the contract’s life. Looking at how funds are positioned and the low volatility, we like looking at the options market for a potential counter trend setup with limited risk. To discuss strategies suitable for you, please call the trade desk.
Resistance: 85.45**
Pivot: 84.30-83.65
Support: 82.05-82.27, 80.90-81.20*
Commitment of Traders
Funds are within arm’s reach of a record net long position. Friday’s report showed them net long 92,646 futures/options contracts.

Volatility Update
CME CVOL for lean hogs remains near multi-year lows, which may make options appealing for someone in looking for a limited risk contrarian trade.

Seasonal Tendency Update
Below is a look at historical price averages for February futures on a 5, 10, 15, 20, and 30 year time frames (Past performance is not necessarily indicative of future results).

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